Sunday, June 20, 2010

US Housing Starts largest monthly decline in total starts since March 2009 and the largest decline in single-family starts going back to 1991 $URE $SRS

o US Housing Starts - Both housing starts and permits fell significantly in May, becoming the most recent housing indicators to drop following the end of the home buyer tax credit. Total housing starts declined 10% to 593,000, driven by a 17.2% decline in single-family starts. This is the largest monthly decline in total starts since March 2009 and the largest decline in single-family starts going back to 1991. Total housing permits declined almost 6%, driven by a decline in single-family permits of almost 10%. This was the second straight month with declining permits following a rising trend between last October and March.
o US NAHB Housing Market Index - The end of the homebuyer tax credit sent builders into a funk in June, when the NAHB housing market index fell 5 points to 17. The end of the credit has now torpedoed building permits, mortgage purchase applications and the NAHB survey; next up in the cross hairs are housing starts, new home sales, and eventually existing home sales. The decline in the June homebuilder survey is probably less surprising than the April and May jump up in this index--one might have thought homebuilders understood the temporary nature of the lift to sales in those months and were looking past that. In any event, all three components -- present sales, expected sales over the next six months, and traffic of prospective buyers -- fell, as did all four major regional indexes.